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Japan ‘Not Planning’ to Widen China Chip Curbs Despite US Push

Washington is also pushing the Netherlands to stop ASML from maintaining and servicing equipment it sold to China before the Dutch chip export curbs came into effect

A chip factory in Japan
A chip factory in Japan. Photo: AFP


Japan has said it will not expand curbs targeting China’s chip industry for now, amid pressure by the US on its allies to implement stricter rules against its key economic rival.

Washington is likely eyeing Japan’s exports of crucial chipmaking equipment and chemicals to China, according to a report by Nikkei Asia, which added that Japanese officials and companies were “taken aback” by US pressure.

“We have no plans to take new measures at this time,” Japan’s Economy, Trade and Industry Minister Ken Saito told Nikkei.


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Washington has, since 2022, implemented two rounds of export curbs targeting shipments of chips and chipmaking equipment to China. US officials say the push aims to curtail China’s efforts to arm its military with cutting-edge technology.

Japan joined those efforts in 2023, saying it was fulfilling its “responsibility as a technological nation to contribute to international peace and stability.” The country — once a key chipmaking giant itself — restricted exports of 23 types of chipmaking equipment, but did not specifically mention China as the target of those curbs.

Japan’s chip industry, meanwhile, was largely uneasy with the curbs due to a lack of a significant market for semiconductors at home.


Crucial time for Tokyo’s chip industry

Japan is home to major chip tool makers such as Tokyo Electron, Advantest, Nikon and Canon, while China has remained the world’s largest semiconductor equipment market since 2020.

China is the leading manufacturer of high tech goods, ranging from electronics to electric vehicles — all of which require a variety of chips to operate. The Chinese government is also pushing for self-sufficiency across the chip supply-chain, partly due to Washington’s efforts to curtail its progress.

That push has led to an explosion in China’s spending on chipmaking equipment. The country is expected to have purchased $30 billion worth of semiconductor equipment in 2023 alone, according to estimates by industry lobby SEMI.

Expanding curbs targeting China would, thus, translate into a significant loss of opportunity for Japan’s chip industry, especially at a time when Tokyo is trying to regain its foothold in the sector. In November last year, Japan’s Fumio Kishida-led government said it will spend roughly 2 trillion yen (about $13 billion) to boost its chip industry.

Japanese firms like Canon are also eyeing the Chinese market, with hopes of filling in the gap left by US curbs. Early this year, Canon said it was hoping to ship its new ‘nanoimprint lithography machines’ to China.

The machines, that Canon claims can significantly curtail chipmaking costs, will be a direct competitor to Dutch chipmaking giant ASML, if they prove to be effective.



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US pressure on the Dutch too

The Nikkei report noted that Washington was also building pressure on the Netherlands to stop ASML from maintaining and servicing equipment it had already sold to China before the Dutch government implemented its own export curbs in 2023.

Under those rules, Dutch chip tool makers need to seek a licence before exporting their most cutting-edge equipment. The move was largely seen as targeting China and a result of US push.

The rules meant that ASML — the world’s biggest producer of cutting-edge lithography systems — was restricted from selling DUV (deep ultraviolet) lithography machines to China. It has never sold its most advanced EUV (extreme ultraviolet) machines in the country due to past restrictions.

ASML had licenses to continue selling some DUV machines to its Chinese customers but those were revoked too at the start of 2024.

In February, Dutch Trade Minister Geoffrey van Leeuwen told the country’s parliament that those restrictions were enforced to prevent China from using ASML’s advanced technology to advance its military. ASML tools are used to make advanced chips that can go into “high-value weapons systems and weapons of mass destruction,” Van Leeuwen said.


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A week later, ASML noted in its annual report that any expansion of chip curbs targeting China were a risk to its business. China was ASML’s second largest market, accounting for 26.3% of its sales.

In the July to September quarter of 2023, China accounted for 46% of ASML’s sales, according to a separate Nikkei report. China’s overall imports of chipmaking equipment rose 93% year-on-year in the quarter.

A key reason behind renewed US pressure on Japan and the Netherlands is likely China’s recent progresses in chipmaking, despite the shadow of export curbs.

Chinese technology giant Huawei Technologies and state-backed chipmaker Semiconductor Manufacturing International Corporation (SMIC) have over the past year made breakthroughs in producing new generation 7 nanometre (nm) chips.

The two are now working on mass producing 5nm chips.

Both firms are sanctioned by the US and remain cut-off from global tech supply chains. But they are believed to be using previously acquired lithography machines for chip production, with the backing of billions of dollars worth of Chinese state subsidies.

China is expected account for the world’s largest share of chip production by 2030, according to SEMI.


  • Vishakha Saxena


Also read:

China Chipmaker Fujian Jinhua Cleared in US Trade Secrets Case

Slower Nvidia Chip Out in Q2 But China Firms ‘Don’t Want It’

US Curbs Set Off Sales, Tech Boom for China Chip Equipment Firms

Threat of More Chip Curbs Spurs Warnings on China Innovation

Access to China ‘Essential’ as it Develops Chips: ASML CEO

ASML Sees Hit From US Chip Curbs But Could Enjoy 2025 Boom

China to Lead 2024 Chip Expansion with 18 New Fabs – SEMI

China’s Dutch Chip-Equipment Imports Jump 1,050% – SCMP

China Way Ahead of US in Chip Startup Funding – PitchBook




Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]


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